No landlord wants a bad tenant. Tenants who damage your property, don’t pay rent on time, and disrupt neighbors end up costing you money and making your job as a landlord difficult.
Great tenants, on the other hand, make your life easier. And nothing is better for a rental business than a high-quality tenant.
To find the tenants you want, it’s crucial that you perform proper tenant screening. Here are seven tenant screening habit that great landlords employ:
- Use Passive Screening
Passive screening occurs before you even receive an application. By targeting the kinds of tenants you want in how you advertise your property, you’re able to attract tenants who would be a good fit while deterring those who wouldn’t be from applying in the first place.
For example, if you have a no-pet policy, then you should make this clear on your property listing. By doing so, tenants with pets will be less likely to apply in the first place, which saves you from having to go through applications and run credit and background checks for tenants who don’t meet your requirements.
- Require a Rental Application
A rental application is where you get to ask tenants questions about themselves. This gives you information about tenants you wouldn’t otherwise have access to, such as employment history and previous residences.
In your rental application, you should also require proof of income via pay stubs or other relevant documents. You want to make sure that your tenant’s monthly income is at least three times greater than the price of rent.
- Call References
In your rental application, you should always ask a tenant to include the names and contact information for employers and previous landlords. Oftentimes, landlords don’t end up actually reaching out, but make sure you do. These references will be able to confirm the employment and residence information that a tenant has provided on their application. Landlords will also be able to give you first-hand insight on someone’s quality as a tenant.
- Run a Credit Report
After you’ve looked at someone’s rental application and haven’t ruled them out, it’s time to run a credit report. Landlords use credit reports to determine whether a tenant will consistently pay rent on time. If you use property management software, you have easy access to credit reports directly from the platform.
You don’t just want to glance at someone’s credit score when running a credit report. Look at specific information, such as how many payments they’ve missed. Somebody who continuously pays late on rent, credit card bills, and other payments can’t be trusted to deliver rent on time.
- Run Background Checks
A background check consists of a criminal history check and an eviction history check. By looking at someone’s criminal records, you can determine if they pose an immediate danger to neighbors or other tenants. It’s your right as a landlord to deny a tenant under these circumstances, but be sure to review your state’s laws regarding criminal records because not all crimes warrant rejection.
An eviction history check will tell you if a tenant has ever been evicted. If someone has been evicted one or more times, this is cause for concern. With that being said, it’s a good idea to learn more about the details of an eviction before making a decision.
- Know Fair Housing Laws
The federal government prevents housing discrimination based on race, color, sex, religion, national origin, disability, and familial status. State and local laws may extend protection to other classes, so be sure to research the laws that affect your area.
If you violate fair housing laws, you could find yourself being sued for discrimination. It’s important to familiarize yourself with these laws so that you don’t break them even if it’s unintentional.
- Adhere to a Tenant Scoring System
The best way to protect yourself from a discrimination lawsuit is to use a tenant scoring system. A tenant scoring system is a list of criteria by which you judge each tenant to determine whether they meet your standards. Income, eviction history, credit report, relevant criminal history, and pet ownership are valid criteria to consider.
It’s crucial that you score every tenant in the same manner, that way you can objectively determine whether they’re qualified. Keep good records in case you get accused of discrimination.
Conclusion
You don’t want to take shortcuts when it comes to tenant screening. Taking the time to thoroughly screen each and every tenant is worth it in the end. If you follow these seven habits, you’ll be on your way to signing leases with the kinds of tenants you want.
